More small businesses in Africa are set to receive major boosts as E-Commerce giant Jumia plans to make bigger the small business loan scheme it initiated earlier this year.
In collaboration with the San Francisco-based lender Branch , Jumia commenced giving start-up loans to small businesses in May. However, the scheme is only opened to small businesses in countries where Jumia operates.
The loans were determinant on vendors sales history with Jumia and projections for the future performance of the businesses.
In Kenya, sellers received loans of up to 30,000 Kenyan shillings (roughly $290), with a six-month term on the loan to finance their businesses. Interest rates on the loans are 1.2% per month.
The loans are made available in seconds on the Branch app and are disbursed through M-Pesa.
So far, 200 vendors have applied for, and received, loans from a beta version of the new program, ahead of the rush associated with Black Friday sales, according to the company.
Jumia’s co-chief executive, Sacha Poignonnec made it known that the expansion of the program is a matter of simplifying the lending processes for small and medium sized businesses in Africa.
Speaking further on the scheme, Poignonnec said, “The Jumia lending program was launched with the aim of making it easier for SMEs to grow their businesses.
“We know that small and medium-sized enterprises on our platforms struggle to secure affordable credit from financial institutions, thereby limiting their potential to invest in their businesses and themselves.”
The company also stated that Jumia sellers across the continent will be able to access credit at terms that only go as high as 12% per year.
All it takes to apply for the program is for sellers to fill out an online application form. Credit decisions will be made within two days.
It is worth knowing that Jumia is a dominant force in Africa with over 126 operations across 23 countries.
